Comment-we need your thoughts

What is he talking about? Here is my two cents pal.The most valuable thing about a blog is the exchange of ideas and opinion. Look at our posts and you will see some heated discussion. Why not join the fray?

You may agree or disagree and that’s fine either way. Feel free to ask a question when appropriate.

Please comment in a post or reply to another readers comments.

Share this:

Like this:

70 comments

I appreciate your blog Mr Quinn, even tho I don’t always agree with everything. As a future blog post, could you please explain why Bernie Sanders repeatedly states that “Americans pay twice as much for health care as the rest of the world”? Is that a true apples/apples comparison for the same medical procedures and quality? Or are Americans twice as sick therefore spending twice as much? Or is he talking about health insurance? I am not interested in politics, but the facts. Thx for considering!

Sanders problem is that he doesn’t distinguish between actual health care spending and insurance premiums. Two different things. Americans do pay more, but there are many reasons including we are one of the most obese countries in the world. He also fails to point out all the constraints and limitations other countries use to contain costs, things that Americans may not accept. I was just speaking with a friend last night whose mother lives in England. She had to wait six months to get a cataract operation. In Spain they assign you doctors and a hospital and you have to get government permission to change. In the UK the standard is a four bed hospital room, not two. It goes on and on while all the other systems also use insurance in some manner and yet they all still struggle with costs on an ongoing basis. Imagine if we have a M4A system with a budget. What happens if we go over budget. Sanders is no doubt well meaning, but incredibly naive as well and so are his young supporters IMO

Richard, found your blog/commentary by way of “Humble Dollar”. Have now read several of your posts, and have enjoyed them greatly. I’ve been a “saver” all of my life, and I’m now approaching retirement after 34 years with my employer. Of course I’ve been reading any and all books and blogs on personal finance and retirement for several years. I was curious, are there any books or blogs that you would recommend? Thanks for all the blogging and tremendous amount of information you provide.

In memory of Edmund Burke, who initiated the Paymaster General Act of 1782, which disallowed government paymasters to draw on money from the Treasury at will, a sculpture by Michael German came to mind of a wiseman bending to pick up a hitherto unnoticed corroded penny he is standing on. I find it sociologically significant that this sculpture was not produced for decades and has been reinstated only in 2013. Dr. G.Heath King

Quinn, you’re an idiot! Worse. You are acting like a shill for bought-and-paid-for conservatives, healthcare companies and Wall Street. Why are you doing this? You are trying to convince people that they should be happy struggling to make ends meet in the wealthiest country in the world; that they should be happy that the wealth is “trickling down” to them. In your world view, senior citizens and teachers are living rich, luxurious lives and healthcare costs are not bankrupting families and that social security is enough for seniors to live on in comfort. This is not so. Stop lying to your readers.

I’m guessing that you have lived your life in a bubble of privilege and entitlement and so have no clue what the real world is like for middle class families and the working poor.

Quinn… while much of what you say is true, much of it is highly misinformed as well. For example, in a recent article you stated that the average adult spends $161/month on clothing. I went to the article you cited, and your source was all over the board in terms of its assertions. The very same article states that the average man spends $323/year ( $27/month) and the average woman spends $571/year ( $48/month) Later, it indicates that a family of 4 with an above average income spends approx $2440 or $51/person per month. I have no idea where they came up with $161/month.

Many, or rather most, of your other assertions were equally uninformed.

I was not making assertions, merely reflecting a variety of surveys which is about as good as it gets in understanding some spending. Clearly all surveys have their shortcomings. The real point is not that each number is correct, but rather that Americans spend above their means as a group and accumulate a lot of unnecessary stuff in the process. Heck, I just read we spend $550 million a year on Twinkies

I enjoyed your article (Blog?) on “14 lies about money that Americans can’t seem to shake” that appeared on msn under Market Watch on June 6 2019. I would like to make one comment on #4:

4. “Teachers are underpaid.” It isn’t possible to pay good teachers commensurate with the value they bring to a community or a child. But generally, they aren’t underpaid. Yes, you need to consider their salary. But you also need to consider vacation time, benefits while working and benefits received once retired, notably pension benefits.

Under #4 “Teachers are underpaid.” Your thinking is very good, but there is one common misconception that is perpetuated: that is that teachers get “vacation time.” When I worked as County Planner for some 8 years I did get paid vacation and holiday benefits. After I went into teaching for the next 25 years, I got no paid vacation nor paid holidays. That, I believe is very standard in almost every teacher contract. We used to jokingly call it an annual contract as a (decently paid) day laborer. Also, most school districts pay their teachers only 9 or 10 times a year. The smart teacher’s would take and divide the annual salary by twelve and set up a savings plan to balance the usable funds to cover every month of the year. The medical benefits usually cover the entire calendar year and in many districts continue until the retiree is eligible for Medicare.

I think if you look at the teacher salary (and benefits) on an annual basis and consider the days and weeks of no school during the year plus the summer break, that would constitute paid time off or vacation. But I can see that if the paycheck actually comes only for 10 months it could be perceived differently, but it is annually salary. If a teacher earns $60,000 and a private worker earns $60,000, the private worker works 262 days less say 15 days vacation That should be compared with a teachers actual work days, right?

I also have a problem with some of your points in Market Watch on June 6, 2019. For one, teachers are underpaid. Once, long ago I graduated thinking I wanted to teach elementary school. Then I learned what I would be paid vs what the same degree would earn me in Corporate America. (Spoiler, 2X that of a teacher plus at the time a pension and a 401K.) Even working summers, I was going to have to have 3 roommates vs instead flipping to the dark side and purchasing a house within a year of graduation.

These days I sit on a school accountability board and get to see the balance sheets. In business, I’m paying kids out of school (so like still in diapers needing their nose wiped they are so young) more than teachers at our local school who are 20 yr veterans of education. (60K BTW.) While no one goes into teaching for the money, the pay cannot be so low as to not being able to afford the cost of living, daycare, etc in the communities they serve. Also, my degree in education did not cost less than other degrees. I’m just very lucky financially I decided to not use it.

First you need to consider total compensation and time worked in a 12 month period. And then you need to consider that the revenue to pay teachers comes from taxpayers who rarely have a total compensation package like teachers and other government employees. There is no real valid comparison with the private sector. Teachers are dedicated people no question, but all things considered I still say they are not underpaid especially relative to the incomes in their communities. In my town the bulk of the tax bill is for education and 60% of that is for pay and benefits.

Your article had some good and bad points and I hate politics so I’m going to comment on your last item — Shopping carts. With the way most stores are automaticing and cutting workers’ hours and numbers, leaving the shopping cart in the middle of the parking lot means one of the employees has to come pick them up –can have a machine do that!! — so for the little guy it just may be job security for them.

“Social Security is going bankrupt.” Wrong again. As long as there are taxes coming in, Social Security can’t go bankrupt. But when the Social Security trust fund is depleted, the incoming taxes won’t be sufficient to pay 100% of promised benefits.

It depends, of course, on what you mean by “bankrupt”. That’s a legal term that doesn’t really apply to a government, particularly one capable printing money.

But, colloquially, I think a fair definition of “bankrupt” is whether Social Security will be able to keep the promises it has made to retirees (without inflating it away). And, in that sense, Social Security not only CAN go bankrupt — it is almost guaranteed, given the demographic trends of fewer children and longer life spans.

Will Social Security be able to pay *something* of what was promised? Sure. But, that’s just fudging the definition of bankrupt — if a business can only pay part of its debts, it’s bankrupt!

Some of them were good. If I may suggest, though, I think you’re missing a very big part of the Social Security picture.

Consider your statement: “Nobody stole the Social Security trust fund. It’s invested in special interest-generating Treasury bonds. Last year, those bonds paid $80 billion in interest, which was then used to pay Social Security benefits.”

OK, but tell me…where does the interest on those bonds come from? In other words, who pays the cash to pay the interest? The answer is…current taxpayers!

So, imagine there was no “fund”. Where would the money to pay benefits come from? Um, that’s right, from taxpayers.

So, what difference does having the fund make? Zero, zilch, nada. The bonds the trust fund holds can’t even be traded (that’s what makes them “special”).

Where did the bonds come from? Well, historically, Social Security tax revenue exceeded the benefits needing to be paid. Congress took the cash from that surplus and “bought” these bonds from the Treasury. Then, they spent the cash in the Treasury! The trickery is that they “bought” something they can, themselves, print as much of as they want (these special bonds).

It’s not inaccurate to say that the “fund” is simply an accounting measure of the taxes received by Social Security, but used to pay for other things. It’s incredibly dishonest and almost completely misunderstood by taxpayers.

I read your article “14 Lies about money that Americans can’t shake” and I must take exception to number 10 Members of Congress are paid too much. You state that they have to either move to D.C. or have two residences which they can’t do on their salaries. I worked in D.C and lived in Norther VA while keeping my permanent residence in Southeastern PA on far less that the salary of a member of congress. I was making $98,500.00 and didn’t have any trouble managing. At the time I had just built a new home and had 2 children, so do blow smoke up my butt about what it takes to keep 2 residences.

And would you do it knowing you might be out of a job in two years? Or give up running a business for an unknown period? I don’t know when you did what you did, but paying rent and all others expenses, property taxes, etc on net of $98,500 seems unlikely today. What expenses were covered by your employer, if any? In any case, it seems to me if we want quality people focused on the job and not personal gain we should pay more.

What makes them special is that they’re untradable on the open market — that’s why they don’t fluctuate in value.

Any surplus the government received in Social Security taxes was *immediately spent by Congress*. Then, they put pieces of paper into a “fund” and said future taxpayers would pay those pieces of paper off — the same taxpayers that would pay the benefits if the fund wasn’t there. The “fund”, in no way, reduced the financial burden on those future taxpayers.

Do you disagree with any of that?

You can assert over and over again that what they did wasn’t “stealing”. At the very least, I think it’s dishonest. Even when you try to explain it to people, they resist the explanation because it’s so absurd.

How Congress takes all government revenue, this year, and “puts it in the trust fund”. That is, they give the money to the Treasury in exchange for 4 trillion or so in “special bonds”. Then, they spend the money in the Treasury as they normally would. We can do that every year! The trust fund will never run out!

Absurd? Well, that’s no different than what’s been happening for the last 50 years.

Did Congress steal the money? Well, depends on what you mean by steal. But, they certainly didn’t do anything that would ease the burden on future taxpayers.

Funding has been the same way since the start in 1935. Without the interest on those bonds full benefits wouldn’t paid today. Some have proposed a portion of the trust be invested in stocks and bonds and all hell breaks lose. Where can trillions of dollars be invested and safe at the same time?

Read your article article “10 retirement lessons from a retired retirement pro” I would like to ask a few questions.
In bullet 2 about emergency funds you mention that you must replenish it if used. Well, if not working how is that done?
Bullet 5 about inflation, I don’t understand the pool of money concept. I start with a desired salary at 1st yr of retirement and increase each year by inflation…well what my model does…does this accomplish the same thing?

Thank for your comment. Regarding emergency funds, they are replenished the same way as when working. A portion of your retirement income goes into an emergency fund each month. In other words, you never actually stop saving. Regarding inflation it sounds like you are following the 4% rule and as long as your assets are sufficient to keep up with inflation, I’d say you are fine. My income is fixed, so I use the pool concept as a hedge for the future. For ten years so far my fixed income stream plus SS has been adequate, mostly because I live below my means.

Thanks for the reply. Okay I had not thought about still contributing once retired. Also since I am not retired yet, I’m modeling what I need for 30 years of retirement. So I start with a Salary at year 1 and then increase it by inflation…not really using 4% rule as after 30 years basically run out of money….no kids LoL BTW the article is not posted on your website? I found it somewhere else.

16 Money Wasters – great article.
I’m sure everyone has additional items to add.
I would like to add payment for storage untis.
It only takes a little bit of time till the cumulative monthly payments exceed the value of the contents stored.

WOW – You missed the really big money wasters – home improvements. We moved to a new
(used) house about 3 years ago. The house purchase price was $207,000. So far, my wife has
spent $20,000 on A/C upgrade so that she could be cool, $2,000 to get interior paint color just
right, $6,000 on a fancy stone patio, $4,000 for various yard improvements, $24,000 for tile floors
and counters in 2 1/2 bathrooms, $5,000 for new carpet (not needed, but not pretty). Just refinanced tp pay off almost $50,000 credit card debt due to the improvements, the appraisal
gave little credit for all the recent improvements, maybe $5,000.

Can you advise what percent of withdrawal for retirement would be if one was working to age 80?
If the recommended percent is 4% at 65, what would the percentage be for 70,75,80?
I never see any information addressing this question beyond age 65.
Thank You

That’s 4% rule is now in question. However, there are many factor involved as well as assumptions for earnings on accumulated assets. Also keep in mind that if money is in a qualified plan like a traditional IRA or 401k, the IRS mandates withdrawal rates that exceed 4% after age 70-1/2. In any case here is something from The Motley Fool. “Now contrast that retiree’s situation with that of an 80-year old retiree with the same annual return (6%) Unless he’s Methuselah, he doesn’t need to plan for a 30-year retirement window, so he can safely take a little more from his savings. A 5% withdrawal at this point would be safe; his portfolio might shrink a little as a result, but unless he’s having trouble supporting himself, this shrinkage won’t pose a significant risk to his financial future. However, if he’s determined to leave as much as possible to his heirs, he might stick to a 4% withdrawal for the year instead so that he can keep his portfolio flourishing for them.”

When the social security retirement age is raised, people who work dangerous jobs are less likely to receive money from Social Security.

When the retirement age is raised, black men and black women are less likely to receive money from Social Security. 1st read this about 26 years ago – differences in life expectancy of black men verse white men.

Raising the Retirement Age: A Sneaky Way to Reduce Social Security Benefits

Some Republicans candidates are promoting a policy change that would hurt workers subsidizing it with a pleasant-sounding phrase

The Atlantic on net – 2015

Over 80,000 have died while on waitlist for Social Security Disability since 2003.

GAO discussed Social Security Disability backlog in 2003.

CBS discussed deaths while on waitlist for Social Security Disability in 2008.

Over $2 trillion of $21 trillion national debt is owed to Social Security.

Most Republicans in Congress chose to murder people. Republicans and Democrats took over $2 trillion from Social Security and then most Republicans in Congress refused to spend the billions needed to end the Social Security Disability backlog by hiring more Administrative Law Judges, other Social Security employees including those who investigate fraud.

Added Sales tax on mining to help pay for Social Security to help Social Security and help deal with harm caused by Mining Law of 1872. Keep in mind I wrote sales tax and not one time royalty fee.

The first commandment for retirement should be “don’t use the term ‘retire’ — use ‘transition’, or something that denotes to your brain that you are not stopping, but moving forward to something else. ‘Retire’ denotes ‘stop’ and you don’t want your brain to grasp this thought.

Dick, My wife is turning 65 in October and I’m struggling to find information on whether she needs to purchase A Supplement Plan, Advantage Plan or keep her covered as a spouse under my retiree medical plan. All I can find are definitions of what Supplement Plans are versus Advantage Plans but no guides as to why you would choose one over the other. My wife has no medical conditions and takes no medications. Our out of pocket costs have been miniscule for years. Other that making sure her doctors are covered by a particular plan is there anything else we should consider? I understand that if you don’t sign up for a Supplement plan initially it may be difficult to coverage later for a serious condition. Is it worth paying for a supplement plan now just to ensure that she can get coverage at a later date should it become neccessary? Thanks

Why wouldn’t you just keep her enrolled as a spouse under your retiree medical plan assuming you can do so for a person on Medicare. Compare what that will cost you with supplemental plan. Advantage plans are mostly like HMOs with restricted networks of doctors.

Keeping her covered under my retiree plan currently costs $250/mo. Which does not change when she turns 65 and that plans becomes secondary to Medicare. I recently saw where the average supplement plan was about $246 but there are some much less. Since her doctors are covered by most of the networks in locally offered Advantage Plans, why wouldn’t they be a good choice, particularly when they have much lower premiums?

No her rate doesn’t drop until I turn 65 next year. They won’t tell me what the lower rate would be so it is difficult to make good cost comparisons. I do have the option of dropping her spousal coverage when she turns 65 in Oct. , enrolling her in some something cheaper than $250/mo and waiting until 2019 to evaluate the cost of keeping my retiree coverage going forward.

If you are still working and you cover your wife she doesn’t need to enroll in Medicare because the employer plan must remain primary coverage until you retire even if you work past age 65. Better check rules with your employer.

I really don’t understand how anyone can feel that traditional Medicare coverage in many cases would be a better alternative than a Medicare Advantage Plan if for no other reason is the fact that traditional Medicare has no out of pocket maximums and most Advantage Plans do (the ones that I have researched often max out at around $5-$6000…To me, this is extremely more important than anything else.

Maybe the solution to trying to find a health plan that fits all is Medicare! Everyone uses Medicare for their health plan and no one can sue a doctor!! (At least Medicare doesn’t discriminate against people with existing conditions!!)

Thanks for your commentary today on drug companies and doctors. Once HR always HR thinking. I miss those tidbits you used to send out thru the company and on email. It’s true. We watch all these commercials and many ask their doctor for those drugs. I look at the commercials; hear all the side affects and think who would ever take that drug??? And Obamacare; they took $738 BILLION out of our Medicare $$ to pay for the plan and the credits given to mostly under 65’s and then tell us the plan is going broke. My one girlfriend works for RWJ and they changed over to the NEW Horizon plan; she needed orthopedic surgery and they have a group that works in EVERY one of RWJ hospitals but they are not on the plan. So she may have to pay 6000 for the surgery she had AFTER Horizon said they’d cover it.

Yore right, my favorite one is the drug used to treat depression, but a side effect is to increase thoughts of suicide. 😱 I wish I was still sending out those e-mails. I like to think they helped some people.

I am agreeing with you post on underfunded public pensions. Most long-seniority or retired public employees (the so-called “pension millionaires”) likely realize that promised pensions are unsustainable and THEIR current motive is to “get theirs” before the pension funds and tax aquifers run dry. Keep in mind that it takes $1 million or more set aside to pay a lifetime pension of $60,000 per year and that million increases as you reckon the cost of health benefits and early retirement.

There might be a possibility for a limited federal “guarantee” that states and municipalities could opt into. I am not talking about a “bailout” where federal money would be involved. I am talking about an insurance program that would protect those public pensions that had been actually earned through long service. The monthly amount guaranteed would be capped at a reasonable amount (say $3000) and pensions derived from spiking, double-dipping, etc. would NOT be covered. Furthermore, to have access to this program, the existing pension fund assets that had been accumulated would have to be turned over to the feds to manage (an independent agency free of congressional raids) plus the states or municipalities would have to pledge a guaranteed revenue stream going forward. The pension millionaires would sue, of course, but hopefully they would pay their own legal fees and the lower-paid employees would prevent use of the pension funds to pay plaintiffs’ lawyers. The main object would be to get the existing pension funds set aside to provide benefits over the long term for all employees rather than have those funds used up in the next 5-10 years.

Those who claim public pensions in excess of the guaranteed amounts would have their legal claims, of course and union leadership will go bonkers. They will sue once they miss a pension payment and some courts will say that it’s unconstitutional. However, due to the separation of powers doctrine, courts cannot order state legislatures to raise taxes or to appropriate funds for pension benefits for the few. So the pension millionaires will be suing pension plans whose funds have been set aside for everyone in the system. They will also sue cities and school districts that are essentially bankrupt and which (if necessary) can file for bankruptcy. Many of these plaintiffs may learn that their claims are uncollectable and decide to accept the guaranteed amount.

This idea is “not nice” of course and a lot of peoples’ expectations and plans will be upset. Generally we believe in keeping the promises that are made. However, in the public sector, it’s all the taxpayers who have to part with money to pay people who are retiring in their 50s with COLA-adjusted pensions and lifetime health insurance. These taxpayers have no expectation or hope of pensions and benefits comparable to what has been promised to the pension millionaires. The “fault” probably rests with former legislatures who made large promises to gain votes — but those people don’t have the resources to pay for the damages they have caused … and they probably have immunity from liability in any event. So as a society, we have to work this out in the fairest possible way to everyone.

I just turned 65 and started Medicare. I am not collecting Social Security. When would I have to start taking Social security Benefits and Paying Part B from Social Security to avoid the Premium Increase.

Last year my daughter had insurance with Obamacare, we helped he by paying additional so she could have A silver plan. Any bronze plan she could have had paid did not have any doctors within 100miles that she could go to. This year she applied and has now dropped below their poverty level. Federal assistance in Obamacare will help only those 100% to 400% of poverty level. Below the Federal poverty level they want you on Medicaid. Medicaid in Florida denied her because she makes too much money working. She could be better off financially and have Medicaid if she quit her job, but wants to improve her situation, not be on relief, and do more with her life!
One benefit they did give her is an exemption number for her tax filing for 2015, they will not fine her if she has no insurance for the year. Moral here is don’t be too poor or you will get no help at all!
Another kicker for her is that her work will allow her only 28 hours max a week due to their avoiding providing health care as required for full time employees with the Obamacare law!

You have pinpointed two of the significant flaws in the law. The coverage gap and the incentive to lower hours. No doctors within a 100 miles doesn’t seem right though. I can’t see how the state insurance laws would allow that.

Respect? What are you talking about? Working people aren’t getting raises in that range. Why do we seniors deserve more and more? Where will the money come from to pay higher COLAs from higher taxes on those trying to raise a family? Seniors had a lifetime to prepare for old age.

FLORIDA CONGRESSMEN 2.9 BILL???? Food for Thought! The USA IS GETTING ABOUT $400 MILLION FROM THE BILLION DOLLAR LOTTERY? OK , I did some MATH from statistic from ssa gov web pages. $882,264,000 annual pay out to 65,098 SSA people. TIMES 2.9 percent equals $25,585,656??? is something wrong?? NO COLA 3 TIMES SINCE 2008 of 4 IN THE LAST 40 YRS. But Federal gets a COLA. JUST SAYING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Obviously this writer voted for Obama and subscribes to the, less work more benefits from the government theory. The fact that she even posted that letter indicates how she perceives her worth and lack of abilities. What a wast of an education which I am sure she worked very hard for.

I do not have a comment on the above. I wanted to get your thoughts on why everyone is only concentrating their concerns on the amount owed by the student in student loans and not on what I think is also very important…How much the parents take out and will have to pay back into their retirement years. I saved for my children’s college tuition but no where near what it takes now to put them through college. Every year that I get the bill, the amount we receive in aid is less and the cost of the tuition goes up by $5000.00. I figured if things keep going the way they have already, my wife and I will be indebt in the amount of $120,000.00 for my two kids to get a four year degree. Talk about a bubble waiting to happen!

Very good point. I share your experience having put four children through college over ten consecutive years using home equity and then remortgaging and only paying off the loans last year, over ten years after the youngest child graduated ( and when I was age 70).

But nobody cares about people like us because we are the great minority. Most people either can’t afford to do this or do not feel it’s their responsibility.

Yeah, parent who save get shafted. Still, the problem it too many folks who are willing to spend anything to send little Jonnie to whatever school they want, thus perpetuating the system. Prices go up with the availability of more money. There are many low to no debt options:
Community college for the first two years.
Do well and earn scholarships to offset tuition.
Work (there’s a novel idea!)
Schools that take a small percentage of one’s pay after graduation in exchange for tuition.
Join military then go to school on military benefits.
In-state vs. out of state schools.
Lower tier schools will often offer excellent financial packages to draw in excellent students.
No reason to go into debt

Can you explain to me, then, how my grandma, who receives about $600/month in SS is now having about $400 taken out for insurance under Obamacare? She will have about $200 to live on for the entire month. This is not a “what’s gonna happen” rumor, but an “it is now a reality”.

Not sure we have all the facts here. If your grandma is on Medicare, she can’t be on Obamacare and wouldn’t be paying more than the standard Medicare premium. Based on the income you state she may even be dual eligible with Medicaid depending on where she lives. Is she paying for some expensive supplemental coverage? I can see no way out of an income of $600 she is paying $400 for health insurance and certainly not the result of the Affordable Care Act. There appears to be more to this story.